1.1                          A bill for an act 
  1.2             relating to human services; modifying efficiency 
  1.3             incentives for nursing facilities; amending Minnesota 
  1.4             Statutes 1994, section 256B.431, subdivisions 3c and 
  1.5             24. 
  1.6   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.7      Section 1.  Minnesota Statutes 1994, section 256B.431, 
  1.8   subdivision 3c, is amended to read: 
  1.9      Subd. 3c.  [PLANT AND MAINTENANCE COSTS.] For the rate 
  1.10  years beginning on or after July 1, 1987 1995, the commissioner 
  1.11  shall allow as an expense in the reporting year of 
  1.12  occurrence the lesser of the actual allowable plant and 
  1.13  maintenance costs for supplies, minor equipment, equipment 
  1.14  repairs, building repairs, purchased services and service 
  1.15  contracts, except for arms-length service contracts whose 
  1.16  primary purpose is supervision, or $325 per licensed bed. 
  1.17     Sec. 2.  Minnesota Statutes 1994, section 256B.431, 
  1.18  subdivision 24, is amended to read: 
  1.19     Subd. 24.  [MODIFIED SHARED EFFICIENCY INCENTIVE.] (a) 
  1.20  Notwithstanding section 256B.74, subdivision 3, for the rate 
  1.21  year beginning July 1, 1993, the maximum efficiency incentive is 
  1.22  $2.20, and for rate years beginning on or after July 1, 1994 
  1.23  1995, the commissioner shall determine a nursing facility's 
  1.24  efficiency incentive by first computing the allowable 
  1.25  difference, which is the lesser of $4.50 or the amount by which 
  2.1   the facility's other operating cost limit exceeds its 
  2.2   nonadjusted other operating cost per diem for that rate year.  
  2.3   The commissioner shall then use the following table to compute 
  2.4   the nursing facility's efficiency incentive. by: 
  2.5      Each increment or partial increment the nursing facility's 
  2.6   nonadjusted other operating per diem is below its other 
  2.7   operating cost limit shall be multiplied by the corresponding 
  2.8   percentage for that per diem increment.  The sum of each of 
  2.9   those computations shall be the nursing facility's efficiency 
  2.10  incentive. 
  2.11        Other Operating Cost             Percentage Applied
  2.12        Per Diem Increment                to Each Per Diem
  2.13        Below Facility Limit                 Increment
  2.14       Less than $0.50                       70 percent
  2.15       $0.50 to less than $0.70              10 percent
  2.16       $0.70 to less than $0.90              15 percent
  2.17       $0.90 to less than $1.10              20 percent
  2.18       $1.10 to less than $1.30              25 percent
  2.19       $1.30 to less than $1.50              30 percent
  2.20       $1.50 to less than $1.70              35 percent
  2.21       $1.70 to less than $1.90              40 percent
  2.22       $1.90 to less than $2.10              45 percent
  2.23       $2.10 to less than $2.30              50 percent
  2.24       $2.30 to less than $2.50              55 percent
  2.25       $2.50 to less than $2.70              60 percent
  2.26       $2.70 to less than $2.90              65 percent
  2.27       $2.90 to less than $3.10              70 percent
  2.28       $3.10 to less than $3.30              75 percent
  2.29       $3.30 to less than $3.50              80 percent
  2.30       $3.50 to less than $3.70              85 percent
  2.31       $3.70 to less than $3.90              90 percent 
  2.32       $3.90 to less than $4.10              95 percent 
  2.33       $4.10 to less than $4.30             100 percent 
  2.34     The maximum efficiency incentive is $2.44 per resident day. 
  2.35     (1) subtracting the allowable difference from $4.50 and 
  2.36  dividing the result by $4.50; 
  3.1      (2) multiplying 0.20 by the ratio resulting from clause 
  3.2   (1); and 
  3.3      (3) adding 0.80 to the result from clause (2); and 
  3.4      (4) multiplying the result from clause (3) times the 
  3.5   allowable difference. 
  3.6      (b) The facility's efficiency incentive payment shall be 
  3.7   the lesser of $2.44 or the product obtained in clause (4).  The 
  3.8   efficiency incentive shall be increased annually for inflation 
  3.9   for rate years beginning on or after July 1, 1996, using the 
  3.10  Data Resources, Inc., forecast for change in the Nursing Home 
  3.11  Market Basket.